Celebrity Estate Planning Mistakes to Avoid

Posted on June 19, 2013 by admin

In an interesting article, Fox Business delved into the “Monumental Estate Planning Blunders of 5 Celebrities.”  The piece looks at estate planning mistakes made from some well-known, now-deceased stars who’s estate ended up out of their hands.

Leona Helmsley, widow of real estate tycoon Harry Helmsely, famously left a $12 million dollar trust to her dog, Trouble.  Ultimately, this only served to cause trouble for her estate, since she simultaneously added the pup to her estate plan while nixing two of her own grandchildren.  Because of the oddity of these actions, a judge awarded $6 million to each of the disinherited relatives and reduced Trouble’s trust to a measly $2 million.

Fox Business also lists Sammy Davis Jr. and Marilyn Monroe on their list of “blunders.”  While Davis Jr. was generous in his will, his estate was not worth enough to cover the hefty tax bill.  Monroe, on the other hand, did not plan her estate thoroughly enough to arrange for unforeseen occurrences.  She left much of her estate to acting coach Lee Strasberg, but when he passed away her assets went to his wife, a stranger to Monroe.  Fox Business relays that if she had used trusts, she could have provided for Strasberg and others of her choice.  Similarly, Jim Morrison’s estate was left to his girlfriend and when she died with no estate plan of her own, his money went to her father.  While his own parents fought this decision, they ultimately ended up splitting the estate, which could have been avoided with a more detailed plan.

Ultimately, celebrity aside, a properly executed estate plan can help avoid a multitude of problems in the long run.  Learn from the mistakes made by the infamous icons of the past, and don’t put off your own estate plan any longer.

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The Importance of Keeping Beneficiaries Updated

Posted on June 7, 2013 by admin

The importance of updating your beneficiary designations, specifically for policies which fall under Federal Employees’ Group Life Insurance (“FEGLI”)  for life insurance policies has just been highlighted by the Supreme Court’s 9-0 decision in Hillman v. Maretta.  During the marriage of Mr. Hillman and Ms. Maretta, Mr. Hillman named Ms. Maretta as the beneficiary of his FEGLI policy.  They later divorced and Mr. Hillman remarried but failed to change the beneficiary of his FEGLI policy.  At the time of Mr. Hillman’s death, Ms. Maretta was still named as the beneficiary and received the benefits for the FEGLI plan, an amount in excess of $120,000.00.  The current Mrs. Hillman brought an action to claim the benefits under Virginia law, which states that divorced spouses cease to be the designated beneficiaries of each other’s life insurance policies.  Instead, the statute appropriately directs that decedent’s widow or widower at the time of death, or if none, descendants, become entitled to the benefits.  Unfortunately for the widow Hillman, the Federal statute provides that the benefits follow in the order of precedence, with the designated beneficiary as the first person in line to receive the proceeds of the policy upon the employee’s death.  The Federal law preempts the state law and the benefits go to the ex-wife.

No matter if it is a divorce, death or simply a change of mind or heart, it is important to know whom you have designated as the beneficiary of not only life insurance policies but IRA accounts, 401(k) accounts, 403(b) accounts, defined benefit plans, defined contribution plans and any other accounts you may possess.  An estate planning attorney will review these designations with you to ensure they are as you desire and not in conflict with your estate planning documents and your desires.

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Estate Planning Faux Pas

Posted on May 29, 2013 by admin

Estate planning is important. If you haven’t already considered an estate plan, there is no time like the present.  When considering how to start this process, you should consider professional advice.  Fields and Dennis has years of experience under its belt and can help you produce an estate plan that is secure, cares for all your loved ones and leaves few uncertainties for family members.  After all, it’s your legacy and it should be carried out as you intended.  Estate planning can be complex, but with the right professional assistance, it doesn’t have to be.

People often make a variety of mistakes when planning their estate.  One of the biggest mistakes is failing to get professional advice.  While the cost of hiring an estate planner can seem unnecessary, it will often save much trouble later.  While you may not be around to deal with the repercussions, a faulty estate plan will cause your loved ones quite the headache.  There can be a lot involved in the estate planning process.  From your basic will, to trusts, life insurance, setting up a health-care proxy, gifts and tax exclusions.  Attorneys can provide much needed guidance when it comes to legal documents and making sure that you have properly covered all of your bases.

When approaching their estate plan, many also fail to properly distribute their material goods.  People often appreciate the sentimental tokens left by family members: a grandmother’s pearls, an aunt’s ring, family china or miscellaneous heirlooms.  While money can be divided and property sold, the mementos of a life are harder to distribute.  When planning your estate, be sure to leave specific instructions for your material assets to avoid later arguments amongst loved ones.

Creating an estate plan is important, and it is a task that many fail to do.  Yet, once you have created an estate plan, there is always more to be done.  Be sure to update the plan periodically, making sure to evaluate beneficiaries and make necessary changes and updates.  Whether it be for personal reasons, or ifpersonal representatives are no longer capable of handling the task due to death or illness, it is important to keep your plan up to date.

Regardless of the mistakes one can make when estate planning, the biggest mistake is to avoid it.  While people understandably do not like to think about their mortality, it is your loved ones who will be impacted by your estate planning choices.  Creating an estate plan is a choice to provide for loved ones, to look to their future and to do your best to solidify your own legacy, as well.

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Estate Planning and Second Marriages

Posted on May 7, 2013 by admin

If you are thinking about remarriage after a divorce, there is much to consider.  Second marriages have become far more common in recent years, as divorce rates and life expectancy both increase.  While pursuing a life with someone you love is an exciting endeavor, especially after the initial devastation that a divorce can cause, there are a few things to reflect on before you take the plunge for a second time.

While you may already have a will or an estate plan in place, how will your new spouse impact this existing plan?  You may have children that are being accommodated for by your will or various trusts.  They may be adult children, or they may be minors, but either way you surely want to provide for their future.  Yet your new spouse may not be financially secure and may need to be provided for as well.  One solution is to set up a trust that would provide for your new spouse until their death, at which time the trust would be terminated and the funds allocated to surviving children.

Prenuptual agreements are often important when considering a second marriage.  After all, while you may not want to think about it at such a joyous time in your life, a large percentage of second marriages do unfortunately end in divorce.  After going through the process of divorce once already, you may be more likely to prepare for this worst case scenario, which will save you time and money in the future.

In addition to accounting for the monetary recompense in the event of divorce or death, a prenuptial agreement can also plan for how money is spent during your new marriage.  With a second marriage, this may be important as often times one or both parties have obligations apart from their new spouse, including children and financial responsibilities related to a prior marriage.  Financial allocations that provide assistance to children or family members can be negotiated and agreed upon, since any debt incurred will ultimately impact the joint finances of the couple.

While a second marriage holds promise for a happy future, it is important to be prepared and have an estate plan in place that provides for the people who are important to you, from your past and your future.

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Estate Planning Lessons from Downton Abbey

Posted on April 3, 2013 by admin

A recent article from The Wall Street Journal offered “Money Lessons from Downton Abbey.”  The popular British drama that takes place in the early 20th century recently ended its third season, but more important than providing entertainment, it can apparently offer valuable estate planning advice.  While it is a period drama and work of fiction, its themes of familial relationships and financial debacles make the PBS program a cautionary tale for families planning their own estate.

Downton Abbey presents the story of a wealthy British aristocrat with three daughters, but no male children to whom he must leave his estate under British property laws of the time. The next two potential male heirs on the list meet a tragic end aboard the Titanic, making the issues surrounding estate planning central to the plot.

So, what are some of the biggest lessons in estate planning to be taken away from the folks in Downton Abbey?  Author Kelly Greene offers many important pieces of advice, but when it comes to planning for your family’s future, the following three are a must.

Utilize trusts to protect your assets.  Trusts can protect your financial future from uncertainty by guarding against poor money management, divorce settlements and family members, who, like the earl in Downton Abbey, may be known to squander money. While we don’t want to “spoil” the third season for those who haven’t yet tuned in, Greene points to an estate planning error that occurs, putting the financial future of a family in jeopardy.

Greene also argues that Downton Abbey points to the important advice of having a will in place before one gives birth.  Expectant parents should secure their estate with wills, trusts and a power of attorney to protect the financial future of the unborn child.

Similarly, Greene states that Downton Abbey presents a strong case for setting up a medical directive which describes your medical wishes should you become incapacitated, and includes the naming of a healthcare proxy to make decisions for you.

Ultimately, the conflicts and drama of Downton Abbey make great television, but no one wants to experience those estate planning nightmares firsthand. Learn from the fictional past and create your own estate plan today.

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Study Says Stories are Most Valued Inheritance

Posted on April 1, 2013 by admin

In a 2012 survey by the Allianz Life Insurance Company of North America, it was determined that family stories are more important to many than material inheritance.

The American Legacies Pulse Study surveyed baby boomers (age 47-66) and elders (72+) and concluded that 86% of baby boomers and 74% of elders surveyed deemed their family’s stories the most important facet of their legacy.

Stories beat our personal possessions and financial inheritance for the top spot, and money was found to be the least significant aspect of inheritance for both age groups.

While baby boomers and elders agree on the importance of a family history, there tends to be a larger disconnect when it comes to the actual preparation of one’s estate.  A significant 75% of elders have previously obtained the services of an estate planning professional, and 79% have discussed their estate plan with their children. Less than 50% of baby boomers have consulted an estate planning attorney or other professional, and a similar number has not participated in a dialogue with their children regarding their will.

While they may not be actively planning for the future, both baby boomers (84%) and elders (82%) agree on the importance of having a living will and health care proxy, providing instruction of their wishes if they become unable to make their own decisions.

While elders may be more apt to feel the necessity of having an estate plan in place, it is something that everyone should think about sooner rather than later. While stories can be passed to family easily and with little effort, an estate plan will prevent your legacy from being misrepresented.  Stories are meant to be shared and can be told and passed on to many. Your financial legacy is not so easily handled and will be in the hands of the courts if you do not have an estate plan prepared.

Although many boomers have yet to establish an estate plan, they do agree with elders on what they look for when choosing a professional to help with the task.  Both boomers and elders desire an estate planner who is “honest and trustworthy” – with a startling 89% of boomers and 91% of elders making it their top priority.   At Fields and Dennis, we understand their concern and we are always here to help.

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Writing Your Social Media #Will

Posted on March 13, 2013 by admin

While writing your will you may think about who will inherit your home, drive your car, or care for your pets.  You may even worry about who will bear the burden of your debt.  With so many things to concern yourself with you may not give a second thought to the afterlife of your social media presence.  But maybe you should.  Years ago this was not an issue, but today social media plays a large role in many of our lives. What happens to your profile and your online presence once you die?

When planning your estate, you may want to appoint an online executor, who will be responsible for handling your online activity – closing e-mail addresses and social media accounts.  This may seem frivolous to some, but with the impact of the internet on our daily lives it is something that must be considered.  Often times Facebook pages and Twitter feeds become impromptu memorials to our deceased loved ones.  Is this what they would have wanted for their profiles? Without a social media component to a will, your loved ones may never know for sure.

Be clear about how you would like your social media profiles handled – whether they should be cancelled completely or left up for friends and family.  When considering your online executor, be a good Facebook friend and leave them a list of your usernames and passwords so that the process will be as painless for your loved ones as possible.

If you already have a will, you can easily add this information as a codicil. If you do not have an estate plan in place, takes the first step by creating a will.  Fields and Dennis can help.  Don’t leave your social media legacy to chance.

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Disinheriting Someone Isn’t Always Easy

Posted on March 4, 2013 by admin

The desire to disinherit someone from a will isn’t always as negative as it sounds. While most times individuals are disinherited out of anger or pride, it isn’t unheard of to desire one person to receive more or less of an estate due to financial and personal need. However, there are certain rules and guidelines to take into consideration when distributing or withholding assets.

First, there are laws that protect a surviving spouse and minor children from having any assets withheld. Second, removing someone from your will completely may have been done years before your actual death. If this is the case, a judge might rule that the person you attempted to disinherit is actually entitled to the assets if he or she feels that the omission was done in error. Third, legally you do not have to leave anything to your parents under the assumption they will die first.

However, under the law, if there isn’t a spouse or children, and you have not identified in your will or trust, to whom your estate should go to in the event your listed beneficiaries pre-decease you, your estate will be given to the next closest relatives: your parents. The same can be said for extended relatives. There is no legal obligation to leave any assets to siblings, aunts, uncles, or cousins, but bear in mind that the next closest relative will inherit in the event of a failure of beneficiaries, as if you had not left a will or trust. Relatives can also contest a will if they feel they played a larger role in your life or if they claim you promised them something.

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Don’t Leave Your Legacy to Chance: Estate Planning For Lottery Winners

Posted on March 4, 2013 by admin

It seems pulled from the pages of a mystery story, but you may have heard it in the headlines recently.  What happens if you win the lottery but die mysteriously shortly after?

Urooj Khan may have gotten lucky when he hit the jackpot for $1 million in the Illinois Lottery, but shortly after things took a terrible turn. Khan died this past July, days before he was set to collect $425,000 in lottery winnings. It first looked like a tragic yet unsuspecting death from natural causes, but after concern from his brother over the unfortunate timing, more tests on Khan’s body revealed that the actual cause of death was cyanide poisoning.

Unfortunately, for his loved ones, he died without a Will in place, deeming a court battle inevitable. Khan’s widow, Shabana Ansari, and his siblings fought for months over his estate, including his lottery winnings.

Ansari has produced documents alleging that the majority of Khan’s estate is rightfully hers. Ansari’s attorney, Al-Haroon Husain, asserts that two months earlier Khan signed the document giving his portion of his business to his wife in the case of his death. According to ABC News, the 38-page document appears to be an agreement between Khan and his business partner in a dry cleaning business. The document includes a clause that states: “Members shall transfer their interest to their respective spouse upon member’s death.”

While Husain claims that the clause was only discovered after the court asked for an inventory of the estate, Khan’s brother Imtiaz questions his brother’s logic in The Chicago Sun-Times: “Why would he [sign an agreement] to transfer everything to his wife? Did he know that he was going to die? Did he know [someone] was going to kill him?”

Husain responded to Imtiaz’ inquiries, “He can question it as much as he wants… Mr. Khan and his business partner signed off on it. It’s the operating agreement for their company. He may not like it but fortunately, the law is the law.”

Khan’s brother also filed a petition with a judge in January, asking Citibank to release information about Khan’s assets to make certain that Khan’s minor daughter from a previous relationship is taken care of by Khan’s estate.

This court battle and confusion over Khan’s intentions could have been avoided if he had an estate plan in place at the time of his death.

For lottery winners, estate planning is a must. While it sounds morbid, especially in the face of all of the excitement that comes with winning the lottery, one of the first things a lottery winner should do is create or review his or her Will and establish an estate plan.

In the unfortunate circumstances of a lottery winner’s death, as we can see with the Khan case, the prize money may be distributed in ways that are not in line with the winner’s wishes. Estate taxes should also be considered, as well as an Irrevocable Life Insurance Trust, which will assist in the payment of estate taxes on the winnings in the case of death.

Consulting an estate planning lawyer is an important way to ensure the appropriate measures are taken with newly acquired winnings. An estate plan can also plan for the future of minor children, providing that money will be distributed upon reaching milestones (i.e. attending college) or a certain age.

The Chicago Sun-Times has since reported that Khan’s estate, predominantly tied up in the dry cleaning business, will go to his wife. The lottery winnings will be split between his widow and his daughter. Whether this is what Khan would have wanted will remain a mystery and a cautionary tale to future lottery winners to institute an estate plan.

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“Talking about the Law” with Bob Flynn on WRCN

Posted on November 9, 2012 by admin

Hugh and I are really looking forward to speaking with Bob Flynn, host of “Talking about the Law” on WRCN Radio. Bob is a family mediator and longtime advocate for family and community wellness. Please tune into WRCN 830AM from 10-11, on Sunday, November 11, and get the scoop on “Navigating the VA System: Claims for Compensation, Pension and Medical”.  Thank you for your interest in veterans affairs this Veterans Day!

About “Talking about the Law“Host and attorney Bob Flynn talks about the law, the third branch of government (the court system), and how it affects you and your families. Bob Flynn is the founding partner of Flynn Law Firm PC with offices located in Wellesley, Boston, Worcester and Springfield, Massachusetts. Flynn has over 30 years experience representing the injured, claimants, insurance companies, businesses and commercial clients in accidents, business disputes, abuse or neglect, and medical, dental and legal malpractice.

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